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Property Owners – Top tips to help avoid property repossession

August 27, 2012 | Professionals  

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Financial worries are never a fun thing to have to deal with, especially if it can lead to the loss of your home. Increasingly, people are finding it difficult to cope with mortgage repayments, leaving many frightened and stressed because they don’t know what to do. In an effort to help you to get things sorted, we offer these 10 tips for avoiding repossession:

1. If you are struggling with mortgage repayments on your Leeds property, you should get in touch with your lender as soon as you can to explain your situation. They may not be happy, but they will appreciate being made aware of your problems and will be more willing to hammer out a solution that works for both parties than if you’d kept quiet, hoping to glide under the radar.

2. Having contacted your lender, you need to find out what your potential options are. They may be willing to allow you to pay off your arrears in instalments; add your arrears to your mortgage loan, which is known as capitalising your arrears; or even take a temporary payment holiday to allow you to get your finances back on track.

3. Another way to ease the struggle is by reducing your monthly repayments by asking your lender to extend your mortgage term. Although this will ultimately mean paying more in the long-term, it can substantially ease the financial burden on a month-by-month basis.

4. You may be able to change the type of mortgage. If you are able to switch to an interest-only mortgage, this could reduce your monthly repayments. However, this option is only viable if you can manage these new payments.

5. It’s probably possible for you to rent out your property, you’ll probably be able to rent out your house for more than your mortgage payments, allowing you to find alternative cheaper accommodation, move in with your partner, friends or relatives easing the burden of your mortgage. You can speak to your mortgage company for a ‘consent to let’ and they’ll probably ask you to produce an ARLA qualified property appraisal. You can book your FREE property appraisal with us, and we’ll gladly advise you on the next steps.

6. If selling the property is a possibility, then this may be an option open to you. With the threat of repossession looming overhead, it is necessary to act quickly, but not rashly. Selling involves a great deal of negotiation, which requires patience. Keep your fingers away from the panic button! If you ‘panic sell’, you will not be able to get the price your property deserves.

7. Although your situation may seem desperate and highly stressful, don’t be tempted to just throw in the towel by handing over the keys to your lender for voluntary repossession. If you do this, it is likely that your debt will increase and you will find it harder to get a mortgage in the future.

8. In the event that your lender or freeholder starts repossession proceedings in the County Court, you absolutely must show up at court. It’s not uncommon for people to simply not turn up if they feel that their situation is hopeless, but this is a terrible decision to make as it basically kills any chance of saving your home.

9. If you are in receipt of income support, income-based jobseekers allowance, income-related employment and support allowance, or pension credit, you could qualify for support for mortgage interest (SMI), which helps home-owners with the costs of mortgage payments. It is not advisable to take out loans to pay off other debts, as this often only deepens your problems.

10. Don’t just sit and stew over your problems. Your options for advice in Leeds include the Citizens Advice Bureau and Leeds City Council – Housing Options. If you need legal advice, make sure you get it well ahead of your court date. It will help you to prepare for your case and have a detailed look at your finances. If you are unable to prepare your case in advance, a duty advice scheme operates in most courts, where an advisor is appointed to give free representation. You will need to arrive at court early, bringing with you all the relevant documents – things like details of your income and correspondence with your lender; you need these in order to show the court what you can pay.

Call us for a chat on 0113 244 5669 should you need any advice about renting out your property.

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